The German Job (or how the Mini was turned into a roaring success)

New Mini designed by BMW as sporty successor to iconic original Austin Mini. New Mini built by BMW in Britain. New Mini becomes global sales success. The end.

Or so the tale might be told in the style of the recent advertisements for the new Mini, which are themed on the idea of exciting adventures with happy endings.

The new Mini has been a runaway success in terms of style and sales, particularly when compared with BMW's previous foray into the British motor industry, the ill-fated purchase of Rover.

The German car maker paid £800m for Rover and lost more than £2bn. By contrast, the Mini is already on the way to a healthy profit for an investment of just £280m.

When production began in 2001, 100,000 sales were expected annually. This year, BMW will sell about 165,000 Minis worldwide, 70 per cent of them overseas, with America and Germany the biggest markets outside Britain.

The success of the car was no foregone conclusion. It was a child of the unhappy marriage between Rover Group and BMW a decade ago. Rover's engineers favoured a small economy car, a modern answer to the old model, designed by Sir Alec Issigonis and first produced in 1959. The team from Munich had in mind a sporty front-wheel-drive BMW, with little concern for space efficiency and fuel economy.

Its future as a British-made product was secured only when BMW promised to take over Rover's plant at Cowley in Oxford. But it was the BMW- favoured concept that won and which is now a familiar sight on our roads. The new Mini's pastiche of the old design was not necessarily going to go down well with commentators and the public. Yet, it has managed to capture something of the magic and appeal of the old Mini.

According to the designer Stephen Bayley, the new Mini is a "great product", with a "ludic quality", which is often found in the best toys and gadgets; thus it inspires the "itch to consume.

"The New Mini doesn't represent a great moment in the history of the automobile, but it is a great one in the history of consumerism," he said.

"Steve Jobs said of his iPod Apple computer, that it looks so good that you want to lick it. You could say that about the new Mini, with its beautiful details and fine physical finish. It just looks cute."

The new car borrows heavily from the original's baby-faced features: the oversized headlamps like large eyes and the grille that grins at the potential buyer.

The Independent's motoring correspondent, John Simister, points out that it is "immensely fun" to punt around. He added: "I have never known a mass-produced car to have such good residuals. They lose very little of their value second hand, such is the demand for them. BMW have tapped into folk memory of the old Mini very successfully. And people like the idea of a British design backed by German standards of engineering."

The view is not unanimous, however. The veteran motoring journalist L J K Setright dismisses the success of the new car as "sheer hype. Engineering doesn't come into it," he said. "It's just the magic of the name Mini. As time goes it will look less and like the old Mini, but by then people won't remember the original."

Alex Moulton, who designed the old car's suspension, is similarly unimpressed. "It's enormous," he said. "The original Mini was the best-packaged car of all time. This is an example of how not to do it... it's huge on the outside and weighs the same as an Austin Maxi.

"The crash protection has been taken too far. I mean, what do you want, an armoured car? It is an irrelevance in so far as it has no part in the Mini story."

Sales success has brought an expansion in the workforce at the Mini production plant in Oxford. BMW now employs 4,500 people in Oxford and a further 2,300 at a plant in Swindon. That is more than MG Rover employs at Longbridge making MGs, Rovers, and engines.

Those who make the new car are enthusiastic. Bernard Moss, 52, who has worked at the BMW plant in Cowley, since 1971, says there is a "buzz" on the factory floor. "I have never known a car to be more phenomenal in all the time I have worked here," he said.

The Oxford plant has also ushered in a new way of working. Production is split into three shifts - two shifts of nine and a quarter hours each weekday from Monday to Thursday and then a 33-hour weekend shift, which is popular with students and housewives.

Production last year was 160,000 cars and output this year is expected to nudge 180,000, which is the maximum capacity of the plant. An extra 30,000 to 40,000 cars could be produced by lengthening shifts and making incremental investments.

That is short of the old Mini's record production figure of 318,475, achieved in 1971, but far better than the 20,000 or so that it declined to. What's more, although Rover Group and its various predecessors hardly made a profit on the five million Minis they manufactured, BMW's margins must be healthier.

At some stage BMW will need to consider further investment - a prospect that has been made all the more likely because the company does not intend to produce the Mini anywhere other than Oxford.

That investment is unlikely to be made until 2007 when the "next generation" Mini is launched. That will also provide the platform for BMW to produce the car in shapes other than the existing saloon.

Helmut Panke, the chairman of BMW, wants to keep his powder dry but nothing is off- limits. "When the BMW-3 series begin life it was just a two-door sedan but look at the range now - everything from a touring to a compact coupé," he said.

There are plenty of people urging BMW to capitalise on the Mini's success straight away by widening the product range. But Mr Panke is wary of diluting a brand that has been so carefully brought back to life. "The building of a brand like Mini has to be done step by step. It has to evolve," he said.

What has made the Mini more profitable than the holders of the purse strings back in Munich ever dreamt possible is the mix of sales.

When the car was launched, the forecast was that the entry level Mini One, priced at £10,400, would make up 60 per cent of sales while the Cooper and Cooper S, at £11,700 and £14,600 respectively, would account for the remaining 40 per cent.

The reverse has happened and the profit on the Cooper and Cooper S, with their characteristic contrasting roof colours, is markedly higher. A diesel variant is now on sale and a convertible is promised for next year. The Mini adventure continues.

THE MINI ADVENTURE

The Mini was designed by Sir Alec Issigonis ­ legend has it on the back of a serviette ­ and the first one was produced on 26 August 1959.

The first cars had an 850cc engine and sold for £497 including tax.

Celebrity owners have included John Lennon, Mick Jagger, Peter Sellers and more recently Madonna, who referred to the car in her last single, "American Life".

14 Minis were used in the making of the film, The Italian Job (left), which helped to immortalise the car.

The Mini was named Car of the Century by Autocar magazine in 1995.

After 41 years and 5 million vehicles in 137 versions, production of the original Mini ceased in October 2000.

BMW launched the new Mini in 2001. It is 11in longer than the original, typically with a 1.6 litre engine and a starting price for a Mini One of £10,300.

BMW sold 144,000 new Minis worldwide in 2002.

In July 2001, 18 members of a Reading female rugby squad squeezed into a new Mini, breaking their own record.

James Davy